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Can Bakken Break Even at $30?

Crude Plunges to Six Year Low Crude oil has fallen to a six year low in recent weeks, but even at the current price of around $43, analysts speculate the Bakken will remain strong. Related: Oil Plunges to Six Year Low West Texas Intermediate crude is now down more than 30% in just the last few months after a 50% rebound earlier this spring. Bloomberg reported this week that a lower profitability point from producers has allowed U.S. oil production to remain near a 40-year high. Bloomberg Analyst, William Foile said, “A single break-even price doesn’t actually exist. Rather, what the model indicates is that at a realized oil price of $29.42, half of wells will generate returns exceeding 10%. This price is considerably lower than the $70 breakeven estimated by industry watchers at the start of the oil price slump.” In McKenzie County, North Dakota, one estimate is […]

Posted On : Published By : Tom Whipple
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Shale-rich Colorado welcomes EPA methane proposals

Colorado Gov. John Hickenlooper says EPA proposals for methane emissions for the oil and gas industry model rules on the books for shale companies working in his state. File Photo by UPI/Mike Theiler DENVER, Aug. 19 (UPI) — The proposal to cut methane emissions from the oil and gas industry models Western state shale rules is already on the books, Colorado’s governor said. The U.S. Environmental Protection Agency called for the first-ever mandates regarding methane emissions generated by the oil and gas industry. Over the next decade, the industry would need to cut methane emissions by at least 40 percent from their 2012 levels. "We are underscoring our commitment to reducing the pollution fueling climate change and protecting public health while supporting responsible energy development, transparency and accountability," EPA Administrator Gina McCarthy said in a statement. The EPA described methane as the second-most prevalent greenhouse gas emitted from human […]

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Report: Groundwater pumping in California has land sinking

AP Photo/Florence Low FRESNO, Calif. (AP) — Vast areas of California’s Central Valley are sinking faster than in the past as massive amounts of groundwater are pumped during the historic drought, state officials said Wednesday, citing new research by NASA scientists. The data shows the ground is sinking nearly two inches each month in some places, putting roads, bridges and vital canals that deliver water throughout the state at growing risk of damage. Sinking land has occurred for decades in California because of excessive groundwater pumping during dry years, but the new data shows it is happening faster as the state endures its fourth year of drought. "We are pumping at historic levels," said Mark Cowin, head of the California Department of Water Resources. He added that groundwater levels are dropping to record levels – up to 100 feet lower than previously recorded. Scientists at NASA’s Jet Propulsion Laboratory […]

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Oil Refinery Outage Outlook Adds to Pressure on Slumping Prices

Crude markets already in a downward spiral sank under the weight of a supply report showing growing stockpiles of oil after a major U.S. Midwest refinery shutdown. And the oversupply may just be getting started. A heavy slate of refinery maintenance in the region this fall threatens to make inventory builds in Cushing, Oklahoma, a common occurrence. The outages will follow trouble at BP Plc’s Whiting refinery in Indiana that meant about 1.5 million barrels of oil didn’t get consumed last week. “There is a lot of maintenance scheduled in the fall,” said John Auers, senior vice president at Turner Mason & Co., a Dallas-based energy consultancy. “Having a lot of plants down for turnarounds tends to push us into an oversupply situation and starts widening out the domestic-international spread.” Heavy refinery outages would leave more crude to fill storage tanks, forcing U.S. prices to fall to encourage shippers […]

Posted On : Published By : Tom Whipple
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Trying to Break the U.S. Energy System for Its Own Good

Cooling towers are reflected in a puddle in Winfield, West Virginia. Photographer: Luke Sharrett/Bloomberg The White House doesn’t want anyone to panic over its new climate rules. Instead of marking a big shift, the Obama team believes the Clean Power Plan is piggybacking on trends already under way in the economy: Natural gas is killing off coal; solar and wind are cheaper than ever; state-level renewable energy and climate policies are spreading. Americans won’t feel a thing. That’s why the head of the Environmental Protection Agency, in her first public appearance since the release of the climate plan, emphasized that the rules wouldn’t cause a disruption for energy companies. "I don’t expect that the energy industry is going to take a right turn," Gina McCarthy said last week . Yet just a short jaunt across the National Mall from the EPA’s headquarters, another part of the executive branch is […]

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British shale company nabs more acreage

British shale company Cuadrilla Resources awarded new acreage for fledgling campaign in the country. Photo by photostock77/Shutterstock LONDON, Aug. 19 (UPI) — British shale natural gas pioneer Cuadrilla Resources said it was awarded two new licenses to explore the reserve potential in Yorkshire. Cuadrilla secured licenses to explore around 750 square miles of combined land in Yorkshire . During the next year, the company said most of the activity would consist of "desktop studies" that will give the company a better idea of the geology and reserve potential. "While we continue to progress our shale gas exploration work in Lancashire, we welcome the potential for exploration in Yorkshire along with the associated benefits of new jobs and economic growth we believe it will bring," Cuadrilla Chief Executive Officer Francis Egan said in a statement. The British Geological Survey started a baseline environmental survey in Yorkshire last week. Third Energy […]

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Kremlin: No word yet on Turkish gas pipeline

Turkey aims to exploit its geographical position to serve as an energy bridge for oil and natural gas supplies running from Eastern economies to Europe. Photo by tcly/Shutterstock MOSCOW, Aug. 19 (UPI) — A source close to Russian energy ministry discussions told state media there are no proposals in the Kremlin from Turkey on a proposed natural gas pipeline. A representative in the Russian Energy Ministry told state news agency ITAR-Tass last week the Kremlin has sent two offers to the Turkish government for consideration on a pipeline project dubbed Turkish Stream. On Wednesday, similar sources said there is still no word on the project from the Turkish government. Russia, the source was quoted as saying, was ready for a "phased implementation" of the project. Earlier, the Turkish government said Russian planners hadn’t come forward with route coordinates for the pipeline through the country . The project can’t move […]

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Norway’s Economy Stagnates as Oil Plunge Saps Investments

Norway’s economic growth slowed in the second quarter as plunging crude prices sap investments and drive up unemployment in western Europe’s biggest petroleum producer. Seasonally adjusted gross domestic product, excluding oil, gas and shipping, grew 0.2 percent, after expanding a revised 0.3 percent in the first quarter, Oslo-based Statistics Norway said on Thursday. Mainland growth was seen at 0.2 percent in a Bloomberg survey. Total output shrank 0.1 percent. “We have confirmation that the economy is decelerating,” said Kjersti Haugland, an analyst at DNB ASA. “There will be a prolonged period of slow growth” as the impact of lower oil prices feeds into the economy, she said. The slump in oil prices is proving painful for Norway’s economy, with almost half its exports related to petroleum. Crude producers and service companies such as state-controlled Statoil ASA have cut more than 20,000 jobs, sending ripples through an economy where one […]

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Oil prices fall again as lower demand U.S. season looms

A worker fills a tank with subsidized fuel at a fuel station in Jakarta April 18, 2013. Oil prices fell on Wednesday after eking out gains in the previous session, with the United States set to enter the lower demand autumn season and Asia’s leading economies continuing to show signs of slowing down. Oil prices edged up on Tuesday after the release of bullish U.S. economic data and as traders placed bets on the prospect of falling crude stockpiles. But a rout that has dominated the past six weeks remains in force, analysts say, and U.S. West Texas Intermediate (WTI) crude and internationally traded Brent have dropped back again. "Any recovery in WTI prices from a six-year low may be short-lived with the U.S. entering the slow demand period in September," ANZ bank said on Wednesday. U.S. crude futures CLc1 were trading at $42.42 per barrel at 0656 GMT, […]

Posted On : Published By : Tom Whipple